What's on the Horizon?
You’re halfway through the year…and what a year it’s been so far! I’m sure I’m not alone when I say this has been one of the most challenging business years yet. And like it or not, there are more challenges to come.
But challenges are easier to face if you know what’s coming. That’s why you watch the trends.
Trend-watching provides insight into where the industry is going and serves as a wake-up call. You can use trends to anticipate competitors’ next moves, formulate new strategies and succeed in an increasingly complex market.
In the spirit of helping you succeed, here are the three trends to watch during the second half of 2023.
?
1. FinTechs Have Come for Your Loans
Your loans aren’t safe anymore. And maybe you already know that. But do you know how dangerous your FinTech competitors have become?
Let’s take a look at a few examples.
First up is Aven’s Home Equity Card. Yep…you read that right. Their slogan is “Credit card in the front. Home equity in the back.”
It taps into the consumer’s home equity while simplifying its use down to the level of a tap or swipe. It also offers 2% cash back, balance transfers and ease of access. In fact, getting your card only takes 3 steps and 15 minutes. Just take a look…
Secondly, Venmo’s Credit Card seeks to simplify cash back rewards for consumers. No matter what your top spending category is, you get 3% cash back on that category. Cardholders don’t need to track categories, worry about cash back limits or calculate cash back. As their commercial says, “easy peasy.”
Lastly, Ninja Holdings is shaking up the personal loan game. They offer same-day personal loans, and they market their loans to credit-troubled people rejected elsewhere. Take a look…
Maybe you noticed a common thread tying these FinTechs together: convenience. Each one offers to make loans easy. Mountains of paperwork? Gone. Origination or closing fees? Also gone.
If you want to beat your competitors, it’s time to maximize the ease of applying for a loan. Online loan decisioning is now a must-have. Speed is vital. If you can’t make your loan application process easy for your members or customers, someone else will.
?
2. AI Doesn’t Always Help Your Institution
AI and automation are all the rage these days. These programs are in the news so much you’re probably already sick of them. And they can be very helpful with brainstorming ideas, quickly writing social media posts and performing small marketing tasks.
But use AI with caution. The results aren’t always what you want.
These complex systems are trained on an internet’s worth of information. A programmer gives the AI this information without instructions and allows it to learn until it can accurately generate and predict text. The technical achievement here is incredible…but it still makes mistakes.
For example, an AI-generated image of an explosion near the Pentagon dropped the S&P 500 by 0.3% this past May. Bond and gold prices rose as investors feared the worst.
This situation shows the potential economic harm AI mistakes can cause on a wide scale. However, AI can also harm your member or customer relationships.
A recent article stated the Consumer Financial Protection Bureau (CFPB) gave financial institutions a stern warning about the use of chatbots after Capital One and Bank of America customers complained about vague answers from the AI programs. The CFPB believes AI could compromise consumer privacy or financial information.
领英推荐
What does this all mean for you?
It means to lead with strategy and use AI warily. Never use AI or automation simply because it’s the newest tech or it’s all the media talks about. Make sure any new technology you use serves your brand, not the other way around.
?
3. Silent Consumer Attrition
When it comes to growing your institution, the lowest hanging fruit you have are your current members or customers. But the problem is…they’re breaking up with you. And they aren’t even sending a text.
The wide array of financial offerings out there are luring once loyal consumers away. In fact, only 29% of consumers are still loyal to their primary financial institution.
That doesn’t mean they’re pulling all their money out and closing their accounts, but it does mean they’re opening new accounts with competitors. Deposits leave bit by bit, and your consumers no longer apply for loans.
This problem is especially dangerous because it’s so hard to detect. It’s a trickle; not a flood. And if left unchecked, your institution might suddenly find itself wasting away…
Don’t let your credit union or community bank “choose poorly.” Make an effort now to retain your members or customers. Make an effort now to bring back the ones straying from you. A few suggestions are:
Plan for What’s to Come?
Do you need to prepare for the complicated future of the financial industry? Creating a focused strategic plan is a great way to turn yourself into a top-tier competitor. Hitting your yearly goals will put you on track for growth and ensure your survival.
As Brandan Pounds of Farmway CU said:
“Investing in On the Mark Strategies opened a lot of doors for us and I hope we continue to walk through them to make Farmway CU the best credit union in north central Kansas.”
?
Want More Tips?
Did you love this newsletter but wish it was more than once a month? If the answer is yes, you’re in luck!
“The Marked For Success Minute” is a free weekly newsletter delivered right to your email inbox every Thursday. It’ll give you bite-sized #strategy, #marketing and #branding tips to grow your #creditunion or #communitybank. Just make sure your IT department knows to let it through your spam filters, and you should be good to go.
Senior Managing Director
1 年Mark Arnold Fascinating read.?Thank you for sharing.